Exhibit 99.1
ImClone Systems
Incorporated
| 180 Varick Street |
|
| New York, NY 10014 | |
| Tel: (212) 645-1405 | |
| Fax: (212) 645-2054 | |
| www.imclone.com |
|
ImClone Systems Incorporated
Investors: |
| Media: |
Andrea F. Rabney |
| David M. F. Pitts |
(646) 638-5058 |
| (646) 638-5058 |
Stefania Bethlen
(646) 638-5058
IMCLONE SYSTEMS REPORTS FIRST QUARTER 2006 FINANCIAL RESULTS
ERBITUX U.S. In-Market Sales Reach $138.0 Million for the Quarter
Diluted Earnings Per Share of $2.51
Release of Tax Valuation Allowance Results in Positive
Diluted Earnings Per Share Impact of $1.08
New York, NY – April 25, 2006 – ImClone Systems Incorporated (NASDAQ: IMCL) announced today its financial results for the quarter ended March 31, 2006.
Total revenues for the first quarter of 2006 were $245.1 million as compared with $85.8 million for the first quarter of 2005. First quarter revenues this year included a “catch-up” amortization effect of approximately $112.7 million associated with the $250 million milestone payment received on March 31, 2006 from our partner, Bristol-Myers Squibb. Revenues include four principal components:
• Royalty revenue of $60.3 million in the first quarter of 2006 compared with $36.4 million in the first quarter of 2005, an increase of 66%. Royalty revenue for the first quarter of 2006 includes $53.8 million, representing 39% of Bristol-Myers Squibb’s in-market ERBITUX net sales of $138.0 million, compared with first quarter 2005 in-market net sales of $87.1 million, an increase of 58%, and fourth quarter 2005 in-market sales of $121.2 million, an increase of 14%. These in-market sales, reflecting a drop-ship distribution methodology, represent ERBITUX shipments to end-user accounts only, with no wholesaler stocking;
• License fees and milestone revenue of $144.4 million in the first quarter of 2006 compared with $24.5 million in the first quarter of 2005. The increase is principally attributable to the above-mentioned “catch-up” amortization effect;
• Manufacturing revenue of $19.3 million in the first quarter of 2006 compared with $11.0 million in the first quarter of 2005. The year-to-year increase reflects a 33% increase in volume purchases by Bristol-Myers Squibb. Purchases by Bristol-Myers Squibb are timed at their discretion to accommodate forecasts and safety stock needs, and are not necessarily indicative of historical in-market sales or future sales expectations. Manufacturing revenue
for the first quarter of 2006 also includes, for the first time, $2.7 million of commercial product sold to our partner, Merck KGaA; and
• Collaborative agreement revenue of $21.1 million in the first quarter of 2006 compared with $13.8 million in the first quarter of 2005. The year-to-year increase reflects reimbursement for higher purchases of clinical materials by Bristol-Myers Squibb and Merck KGaA and higher reimbursements for royalty payments.
Total operating expenses for the first quarter of 2006 were $101.5 million (including $1.9 million of stock option expenses as determined in accordance with FAS 123R), compared with $61.5 million in the first quarter of 2005. Operating expenses included:
• Research and development expenses for the first quarter of 2006 were $33.0 million (including $.5 million of FAS 123R stock option expenses), compared with $21.2 million in the first quarter of 2005. The year-to-year increase reflects expenses associated with higher shipments of clinical materials to our partners, higher utility costs and increased headcount, principally in product and process development;
• Clinical and regulatory expenses in the first quarter of 2006 were $15.1 million (including $.3 million of FAS 123R stock option expenses), compared with $9.4 million in the first quarter of 2005. The increase principally reflects higher clinical trial expenses associated with ERBITUX and the Company’s pipeline;
• Marketing, general and administrative expenses were $18.0 million in the first quarter of 2006 (including $1.1 million of FAS 123R stock option expenses), compared with $17.6 million in the first quarter of 2005;
• Royalty expenses were $20.1 million in the first quarter of 2006 compared with $12.6 million in the first quarter of 2005 as the result of higher ERBITUX sales. Approximately $8.6 million of the 2006 expenses are reimbursed as a component of Collaborative agreement revenue, resulting in net royalty expenses of $11.5 million for the first quarter of 2006 compared with $8.1 million in the first quarter of last year; and
• Cost of manufacturing revenue was $15.4 million in the first quarter of 2006 compared with $.7 million in the first quarter of last year. These costs represent fully absorbed manufacturing costs in 2006, as substantially all previously expensed material has been sold through to our partners.
The effective tax rate for the first quarter of 2006, and the estimate for the full year, is approximately 13%. In addition, in the first quarter of 2006, the Company released a portion of its deferred tax asset valuation allowance. The impact of the release resulted in a benefit to tax expense of approximately $99.5 million, which was recognized in the first quarter of 2006. The combination of both these items resulted in a net tax benefit, in the first quarter of 2006 of $80.3 million.
Net income for the first quarter of 2006 was $229.6 million compared with $28.8 million in the first quarter of last year. Diluted earnings per share were $2.51 in the first quarter of 2006 compared with $.33 in the first quarter of 2005. To provide investors with a clearer picture of the Company’s growth versus last year, a reconciliation of non-GAAP diluted earnings per share to diluted earnings per share prepared in accordance with GAAP is set forth below. Non-GAAP earnings per share, excluding the effects of the one-time tax benefit, were $1.43 in the first quarter of 2006.
(Diluted per share amounts)
(Unaudited)
|
| Three Months |
| Three Months |
| ||
GAAP diluted earnings per share |
| $ | 2.51 |
| $ | .33 |
|
Release of valuation allowance |
| (1.08 | ) | — |
| ||
Non-GAAP diluted earnings per share |
| $ | 1.43 |
| n/a |
| |
The company believes that it is useful to present non-GAAP diluted earnings per share financial measures because it provides investors with a more complete understanding of the Company’s underlying operational results and trends. You should not consider non-GAAP diluted earnings per share financial measures in isolation or as substitute for such measures determined in accordance with U.S. GAAP, as set forth above. Our definition of adjusted earnings may differ from other such measures.
Conference Call
ImClone Systems will host a conference call with the financial community to discuss first quarter 2006 financial results today, Tuesday, April 25, 2006, at 11:00 AM Eastern Daylight Time.
The conference call will be webcast live and may be accessed by visiting ImClone Systems’ website at www.imclone.com. A replay of the audio webcast will be available under “Earnings Webcast” in the “Investor Relations” section of the Company’s website starting shortly after the call on April 25, 2006.
Those parties interested in participating via telephone may join by dialing (888) 562-3356 domestically, or (973) 582-2700 for calls outside of Canada and the United States, and referencing conference identification number 7268694. A telephone replay of the conference call will be available shortly after the call until May 2, 2006 at midnight Eastern Daylight Time. To access the telephone replay, dial (877) 519-4471 domestically, or (973) 341-3080 for calls outside of Canada and the United States, and enter the conference identification number 7268694.
About ImClone Systems Incorporated
ImClone Systems Incorporated is committed to advancing oncology care by developing and commercializing a portfolio of targeted biologic treatments designed to address the medical needs of patients with a variety of cancers. The Company’s research and development programs include growth factor blockers and angiogenesis inhibitors. ImClone Systems’ strategy is to become a fully integrated biopharmaceutical company, taking its development programs from the research stage to the market. ImClone Systems’ headquarters and research operations are located in New York City, with additional administration and manufacturing facilities in Branchburg, New Jersey.
Certain matters discussed in this news release may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and the Federal securities laws. Although the company believes that the expectations reflected in such forward-looking statements are based upon reasonable assumptions, it can give no assurance that its expectations will be achieved. Forward-looking information is subject to certain risks, trends and uncertainties that could cause actual results to differ materially from those projected. Many of
these factors are beyond the company’s ability to control or predict. Important factors that may cause actual results to differ materially and could impact the company and the statements contained in this news release can be found in the company’s filings with the Securities and Exchange Commission, including quarterly reports on Form 10-Q, current reports on Form 8-K and annual reports on Form 10-K. For forward-looking statements in this news release, the company claims the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. The company assumes no obligation to update or supplement any forward-looking statements, whether as a result of new information, future events or otherwise.
(see attached tables)
IMCLONE SYSTEMS INCORPORATED
Consolidated Condensed Statements of Operations
(Unaudited)
(in thousands, except per share data)
|
| Three Months Ended |
| ||||
|
| March 31, |
| ||||
|
| 2006 |
| 2005 |
| ||
|
|
|
|
|
| ||
Revenues: |
|
|
|
|
| ||
Royalty revenue |
| $ | 60,270 |
| $ | 36,372 |
|
License fees and milestone revenue |
| 144,403 |
| 24,534 |
| ||
Manufacturing revenue |
| 19,349 |
| 11,019 |
| ||
Collaborative agreement revenue |
| 21,109 |
| 13,846 |
| ||
Total revenues |
| 245,131 |
| 85,771 |
| ||
Operating expenses: |
|
|
|
|
| ||
Research and development |
| 32,993 |
| 21,173 |
| ||
Clinical and regulatory |
| 15,081 |
| 9,398 |
| ||
Marketing, general and administrative |
| 18,001 |
| 17,623 |
| ||
Royalty expense |
| 20,066 |
| 12,566 |
| ||
Cost of manufacturing revenue |
| 15,402 |
| 743 |
| ||
Total operating expenses |
| 101,543 |
| 61,503 |
| ||
|
|
|
|
|
| ||
Operating income |
| 143,588 |
| 24,268 |
| ||
|
|
|
|
|
| ||
Other income, net |
| (5,702 | ) | (4,932 | ) | ||
|
|
|
|
|
| ||
Income before income taxes |
| 149,290 |
| 29,200 |
| ||
Income tax (benefit) provision |
| (80,301 | ) | 380 |
| ||
|
|
|
|
|
| ||
Net income |
| $ | 229,591 |
| $ | 28,820 |
|
|
|
|
|
|
| ||
|
|
|
|
|
| ||
Income per common share: |
|
|
|
|
| ||
Basic |
| $ | 2.75 |
| $ | 0.35 |
|
Diluted |
| $ | 2.51 |
| $ | 0.33 |
|
Shares used in calculation of income per share: |
|
|
|
|
| ||
Basic |
| 83,624 |
| 83,278 |
| ||
Diluted |
| 91,817 |
| 92,648 |
| ||
IMCLONE SYSTEMS INCORPORATED
Consolidated Condensed Balance Sheets
(Unaudited)
(in thousands)
|
| March 31, |
| December 31, |
| ||
|
| 2006 |
| 2005 |
| ||
Assets |
|
|
|
|
| ||
Current assets: |
|
|
|
|
| ||
Cash and cash equivalents |
| $ | 275,861 |
| $ | 3,403 |
|
Securities available for sale |
| 714,838 |
| 752,973 |
| ||
Inventories |
| 75,072 |
| 81,394 |
| ||
Other current assets |
| 89,761 |
| 71,348 |
| ||
Total current assets |
| 1,155,532 |
| 909,118 |
| ||
|
|
|
|
|
| ||
Property, plant and equipment, net |
| 419,970 |
| 406,595 |
| ||
Other assets |
| 116,516 |
| 27,702 |
| ||
Total assets |
| $ | 1,692,018 |
| $ | 1,343,415 |
|
|
|
|
|
|
| ||
Liabilities and Stockholders’ Equity |
|
|
|
|
| ||
Current liabilities |
| $ | 291,560 |
| $ | 242,119 |
|
Deferred revenue, long term |
| 304,074 |
| 246,401 |
| ||
Long-term obligations |
| 602,993 |
| 602,491 |
| ||
Total liabilities |
| 1,198,627 |
| 1,091,011 |
| ||
|
|
|
|
|
| ||
Stockholders’ equity |
| 493,391 |
| 252,404 |
| ||
Total liabilities and stockholders’ equity |
| $ | 1,692,018 |
| $ | 1,343,415 |
|